BOSTON — Leaders in the Massachusetts Senate are proposing a bill to help improve the state’s water infrastructure.

The plan would reduce the $21 billion long-term funding gap for local drinking-water and wastewater infrastructure, calling for increased state borrowing and incentives for municipalities to adopt practices that could include charging local consumers more for water.

The proposal from Senate Democrats would authorize the state Water Pollution Abatement Trust fund, managed by Treasurer Steven Grossman, to borrow up to $50 million more a year to fund local water projects at low, flexible interest rates for cities and towns.

Municipalities would also be allowed to charge new mitigation fees on business or residential developers to cover costs of drawing more water to supply the development.

Many of the issues the proposed bill addresses were identified in a report filed in 2012 by the Water Infrastructure Commission, created in 2009 and chaired by state Sen. Jamie Eldridge, D-Acton.

The report noted that there was a gap of $11.2 billion in wastewater infrastructure repairs and $10.2 billion in drinking water infrastructure repair that will be needed over the next 20 years.

“Many communities face challenges of repairing water infrastructure,” Eldridge said at press conference Thursday to announce the bill.

After the news conference, Eldridge said many small communities spend their limited funds on cleaning and delivering water, but not on repairing infrastructure.

Enterprise funds are “sort of a rainy-day fund at a local level,” Eldridge said.

This bill “looks for the first time at conservation,” Tarr said, referring to a separate fund created by the bill that would provide money for innovative infrastructure programs, including ways to collect rainwater and use solar energy to power infrastructure.

Tarr mentioned that the program could fund ways to conserve water in rivers and estuaries such as the Ipswich River.

Senate President Therese Murray, who opened the press conference, said it was a luxury that the state had access to water resources and drinking water.

“It’s easy to see the consequences when our water fails,” Murray said.

Murray, D-Plymouth, said she hoped to hold a public hearing soon and to pass the bill into law before lawmakers go into the November recess.

Eldridge closed his speech by citing the opening lines of the Water Infrastructure Commission’s 2012 report, saying that it is unremarkable that when we open the tap in the morning, we get clean fresh water, until the day comes that no water comes out.

“This bill is a solid first step in making sure this day never comes,” Eldridge said.

Material from Sentinel & Enterprise wire services was used in this report.